July 09, 2020

Pat LaMarche and political realism

In a column last month on Pat LaMarche, Todd Benoit suggested: “In politics, you matter only to the extent everyone else thinks you do” There is no denying this self-fulfilling nature of political life. Nonetheless, rulings by the Maine Ethics Commission to overlook obvious candidate endorsements in ads purchased by Democratic and Republican PACs surely don’t help LaMarche. I am not a political prognosticator, but I would bet that if Maine citizens seriously consider her views on healthcare, she would move well into double digit territory. Were her ideas to be implemented, Maine would be both a more just and a more competitive state.

The final verdict on Dirigo remains to be written. Its authors are to be commended for reminding us about the plight of the uninsured. Nonetheless, Dirigo will likely fall short of its promises. It has brought some uninsured citizens under its umbrella, but the ranks of uninsured continue to grow. Dirigo Choice is a bare bones program that doesn’t excite many small business owners. The program has also inadequately controlled costs for currently insured businesses and individuals. Many Anthem packages, already full of huge co-pays and deductibles, face a rate increase for next year of 20%.

By providing minimum insurance coverage to some uninsured, Dirigo does curb a modest amount of the cost shifting that occurs when the uninsured appear in emergency rooms. In addition, the Baldacci Administration has implemented some cost control measures to curb unnecessary duplication of new technologies. Unfortunately, Dirigo does not address the largest controllable cost of health care, the administrative waste implicit in our competitive, corporate delivered health insurance system.

Healthcare costs are growing throughout the industrial world. Some costs are attributable to new technologies that extend life. As Paul Krugman pointed out in a New York Review of Books article last February, this is the good reason for healthcare inflation. Nonetheless, the United States produces healthcare outcomes (measured by such statistics as longevity and infant mortality) that lag behind its competitors even while paying a far larger percentage of its GNP for these inadequate outcomes.

Other industrial democracies provide healthcare as a matter of right paid for by public authority. Such systems are often derided in this country as “socialized medicine.” In most of these nations, however, doctors are not employees of the government and hospitals are run by non- profit entities. And, as Krugman points out: “The frequent claim that the United States pays high medical prices to avoid long waiting lists for care also fails to hold up in the face of the evidence.” Many US citizens can’t even get in line, and shortages in some social democracies could be eliminated by modest expenditures that would still leave these nations’ health budgets far less expensive than ours.

Competition among insurance firms is a struggle among middlemen that adds cost but no value to the final product. Anthem, Aetna, Pilgrim etc compete not by delivering better quality hernia repair or higher rates of cancer survival but through advertising and devising strategies to exclude or deny coverage to those needing care. In addition, private firms must make a profit on top of all costs, and the relative scarcity of carriers in rural markets like Maine’s often allows large profit margins.

The US does offer one example of a generous, efficient public system, Medicare. Medicare is not perfect, but it is less costly and better positioned to respond to popular concerns than private alternatives. In 2003, Medicare spent 2% of its revenues on administrative costs while private insurers spent 13%.

LaMarche’s proposal, which carefully shows how Maine could deflect Federal obstacles to sweeping reforms, amounts to a program of Medicare for all Maine citizens. Maine citizens would continue to choose their own doctors. Health providers, who would retain their current independence, would bill one public authority representing Maine providers and consumers. Maine citizens and physicians wouldn’t wrestle with innumerable competing forms. The system would be financed by a tax on Maine businesses pegged to levels of employment. Cost savings from eliminating the corporate middlemen would allow everyone to be covered for lower total cost.

The t word inevitably produces hackles. Nonetheless, before rejecting the plan businesses, many of which pay huge insurance premiums that in fact subsidize other uninsured workers, should go to LaMarche’s webpage. They should calculate how their taxes would compare with current and projected future premiums.

Why business leaders both here and nationally tolerate the world’s most costly and inefficient health care system is beyond me. GM and Ford are dying in part because of healthcare costs foreign competitors do not bear. If Maine were to enact its own Medicare for all, it would reduce costs, keep more health dollars in Maine, and gain an immense competitive advantage. The strongest argument against LaMarche’s proposal seems to be that it is “unrealistic.” It is unrealistic only as long as most of us fail to give it serious consideration. When and if that will change is also beyond me.

John Buell is a political economist who lives in Southwest Harbor. Readers wishing to contact him may e-mail messages to jbuell@acadia.net.

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